Euro climbs to seven-month highs ahead of US inflation test
Dollar on the backfoot
Pound eases after inflation data
Kiwi slides on rate cut
Updated at 1127 GMT
By Sruthi Shankar
Aug 14 (Reuters) -The euro hit a seven-month peak against the dollar on Wednesday, as traders bet U.S. consumer prices data later in the day will keep the Federal Reserve on course to cut interest rates next month.
The euro EUR=EBS rose as much as 0.3% to $1.1029, surpassing the high hit during the market turmoil last week and was trading at its strongest level since January 2. The currency was last up 0.25% at $1.1023.
The dollar eased against a swathe of currencies ahead of U.S. inflation data at 8:30 a.m. ET (1230 GMT), which is expected to show the Consumer Price Index (CPI) increased 0.2% in July, on a month-on-month basis, following a 0.1% decline a month ago.
"Traders are positioning for a weaker CPI number, which of course (poses) a risk that if the CPI comes in line or little bit with an upside surprise, the dollar is going to go strong again," said Volkmar Baur, an FX analyst at Commerzbank.
"If it surprises on the downside, it shouldn't be swaying the Fed in the direction of a 50-basis point cut because inflation is a lagging indicator and a somewhat weaker CPI wouldn't be a signal of an impending recession."
The dollar softened on Tuesday after data showed U.S. producer prices increased less than expected in July, pointing to moderating inflation pressures.
Traders had been widely expecting a rate cut in September before the producer price data, and ramped up bets for a super-sized 50 basis-point cut after the release to 56% from 53% a day earlier, according to CME Group's FedWatch Tool.
STERLING DIPS, KIWI SLIDES
Sterling GBP=D3 slipped 0.2% to $1.2843 after data showed the rise in British consumer price inflation was smaller than expected in July as services prices - closely watched by the Bank of England (BoE) - rose less rapidly.
Financial markets priced in a 44% chance of a quarter-point BoE rate cut in September, up from 36% before the data was released.
"We would say it's still consistent with a stabilisation in inflation, not a further disinflation. We're looking for the BoE to be more cautious than the Fed and the ECB because it seems inflation in Great Britain is going to be a bit more stubborn and the economic cycle seems to be picking up again," Commerzbank's Baur added.
The kiwi NZD=D3 fell as much as 1.2% after the Reserve Bank of New Zealand reduced the cash rate by a quarter point, its first easing since early 2020 and coming a year earlier than its own projections. The currency was last trading 1% weaker at $0.6019.
Meanwhile, Japanese Prime Minister Fumio Kishida's decision to not run for re-election in his party's leadership race next month had little effect on markets, analysts said.
The yen JPY=EBS weakened slightly against the dollar, which was up 0.1% at 146.95 yen.
"Probably the impact on the economy and financial markets should be relatively limited because Mr. Kishida's policies, if I try to characterize them, are really wide ranging and not focused on specific themes," said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management.
"The big question would be who would be next. That will be more important."
The dollar eased against the Norwegian crown NOK=D3, falling 0.5% to a one-month low of 10.68 crowns, and dropped 0.6% against the Swedish crown SEK=De to a two-month trough of 10.40 crowns.
World FX rates https://tmsnrt.rs/2RBWI5E
New Zealand joins the rate cut club https://reut.rs/3WJ385Q
Reporting by Kevin Buckland in Tokyo and Sruthi Shankar in Bengaluru; Editing by Kim Coghill, Ana Nicolaci da Costa and Emelia Sithole-Matarise
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.
